Disney to lay off 7,000 workers in major cost-cutting restructure
The Walt Disney Company on Wednesday announced a sweeping restructuring under recently reinstated boss Bob Iger, cutting 7,000 jobs as part of an effort to save $5.5 billion US ($7.39 billion Cdn) in costs and make its streaming business profitable.
The layoffs represent an estimated 3.6 per cent of Disney’s global workforce.
Shares of Disney rose eight per cent to $120.77 in after-hours trading.
Iger said he would reorganize the company into three segments: an entertainment unit that encompasses film, television and streaming; a sports-focused ESPN unit; and Disney parks, experiences and products.
“This reorganization will result in a more cost-effective, co-ordinated approach to our operations,” Iger told analysts on a conference call. “We are committed to running efficiently, especially in a challenging environment.”
Iger also said he would ask the company’s board to restore the dividend for shareholders by the end of 2023.
The CEO, who came out of retirement in November to run Disney for two more years, is under pressure to improve financial returns. Activist investor Nelson Peltz is fighting to join Disney’s board, arguing the company has overspent on streaming and fumbled succession planning.
Disney is the latest media company to announce job cuts in response to slowing subscriber growth and increased competition for streaming viewers. Warner Bros. Discovery and Netflix previously underwent layoffs.
Disney earlier reported its first quarterly decrease in subscriptions for its Disney+ streaming media unit which lost more than $1 billion.
Third, restructure in five years
This marks Disney’s third restructuring in five years. It reorganized its business in 2018 to accelerate the growth of its streaming business, and again in 2020, to further spur streaming’s growth.
In November 2020, Disney announced that it would lay off 32,000 workers, primarily at its theme parks. The cuts took place in the first half of fiscal 2021.
On Wednesday, Disney said it planned to cut $2.5 billion in sales and general administrative expenses and other operating costs, an effort that is already under way. Another $3 billion in savings would come from reductions in non-sports content, including the layoffs.
For the quarter that ended on Dec. 31, Disney reported adjusted earnings per share of 99 cents, ahead of the average analyst estimate of 78 cents, according to Refinitiv data. Net income came in at $1.279 billion, below analyst estimates of $1.429 billion. Revenue hit $23.512 billion, ahead of Wall Street estimates of $23.4 billion.
The reorganization marks a new chapter in the leadership of Iger, whose first tenure as CEO began in 2005. He went on to fortify Disney with a roster of powerful entertainment brands, acquiring Pixar Animation Studios, Marvel Entertainment and Lucasfilm.
A decade later, Iger repositioned the company to capitalize on the streaming revolution, acquiring 21st Century Fox’s film and television assets in 2019 and launching the Disney+ streaming service that fall.
Iger stepped down as CEO in 2020 but returned to the role in November 2022.
Now, Iger will seek to put Disney’s streaming business on a path to growth and profitability. The new structure also makes good on Iger’s promise to restore decision-making to the company’s creative leaders, who will determine what movies and series to make and how the content will be distributed and marketed.
US Fed announces latest interest hike in wake of banking turmoil – Al Jazeera English
The Fed has continued its cycle of rate increases aimed at stemming inflation, but indicated a pause could be on the horizon.
The United States Federal Reserve has announced its latest interest rate hike, a move aimed at lowering inflation by making borrowing more expensive for consumers.
The increase of a quarter of a percentage point on Wednesday sets the US central bank’s benchmark overnight interest rate in the 4.75 to 5 percent range, its highest level in 15 years.
The increase was widely expected and underscores the Federal Reserve’s determination to rein in inflation, which remains above policymakers’ long-term annual target of two percent.
But the interest rate increase follows the sudden failures this month of Silicon Valley Bank (SVB) and Signature Bank. Critics blamed the Fed’s relentless rate hikes for contributing to the failures, part of the biggest banking sector meltdown since the 2008 financial crisis, and some observers speculated that policymakers would be forced to pause the interest rate increases.
When asked on Wednesday if such a pause had been considered for the latest cycle, Federal Reserve Chair Jerome Powell said, “We did consider that.”
Nevertheless, Wednesday’s policy statement said the US banking system is “sound and resilient”. It added that recent stress in the sector was “likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation”.
The Fed also indicated that a pause in interest rate increases may be on the horizon. The latest policy statement omitted the oft-repeated language that “ongoing increases” in interest rates “will be appropriate”.
That phrase had been in every policy statement since March 16, 2022, when the Fed made its decision to start hiking rates to address inflation.
Now, the language has been softened. On Wednesday, the policy-setting Federal Open Market Committee said instead that “some additional policy firming may be appropriate”.
That leaves open the chance that the Fed may still lift rates one more quarter percentage point, perhaps at its next meeting in May, but it also suggests that the next hike could represent an initial stopping point for the rate increases.
Wednesday’s hike was the same size as the central bank’s previous rate decision in February.
The three major US stock indexes, which were mostly languid prior to the Fed announcement, moved higher in the immediate aftermath, as investors digested the hike and the accompanying statement.
Meanwhile, Powell said on Wednesday that — while recent stress on the banking system has added uncertainty to the outlook — it’s still possible the economy may not face a sharp downturn as the Fed works to contain inflation.
In terms of a soft landing for the economy, “There’s a pathway to that, and that path still exists,” Powell said.
Officials also projected the unemployment rate would end the year at 4.5 percent, slightly below the 4.6 percent seen in projections issued in December. The outlook for economic growth also fell slightly to 0.4 percent from 0.5 percent in the previous projections.
Inflation is now seen ending the year at 3.3 percent, compared to 3.1 percent in the last projections.
Alberta premier pitches more gas-fired power plants as UN climate panel calls for phaseout
Premier Danielle Smith says renewable energy is unreliable and that Alberta should build additional gas-fired power plants for a more predictable source of electricity.
“This is a natural gas basin,” Smith told delegates at the Rural Municipalities of Alberta (RMA) convention in Edmonton on Wednesday. “We are a natural gas province. And we will continue to build natural gas power plants, because that is what makes sense in Alberta.”
In response to questions from rural councillors, Smith also said she’s looking at ways to ensure solar and wind companies set aside money to reclaim land in the future for when a renewable installation is dismantled.
“I think that it needs to be addressed at the start, or we’re going to have the same problem that we had with the orphan wells, and why would we want to bring that to the province of Alberta?” said Red Deer County Mayor Jim Wood.
Smith said she met with power providers and learned the province’s electricity grid twice came close to needing more power than it could supply in the last few months.
She pointed to stagnant air and solar panels covered with snow and ice leading to a dearth of wind and solar generation at those times.
The emissions from natural gas plants can be captured and sequestered to meet climate targets, she said.
Smith’s promotion of more natural gas-fired power plants comes days after the United Nations’ Intergovernmental Panel on Climate Change said wealthy countries should phase out gas plants by 2035 to prevent irreversible damage to the planet.
The premier said it concerns her to see solar panels and wind farms installed on arable land.
Kara Westerlund, vice-president of RMA, says rural councils share that concern. She told reporters the installations should be going onto brownfields rather than “taking some of the best growing soils and agricultural land out of production.”
She sees renewable energy sources as complementary to oil and gas.
“We’ve never felt that one is going to replace the other,” Westerlund said.
Renewables a cheap source of energy, researcher says
RMA members previously voted for a resolution calling on the province to require renewable companies to pay for a bond that would cover the costs of removing solar panels or wind turbines past their useful lives.
The province already has a regulation from 2018 that stipulates how the sites are to be decommissioned.
Smith said she’s considering requiring renewable companies to set aside a proportion of revenue to save for site cleanup costs — and that the remediation money should transfer to any new site owners.
However, devising a solution for unreclaimed oil and gas sites is Smith’s priority.
“Once people feel comfortable that we’ve got the right model there, then the next obvious question is, what are we going to do about solar and wind?” she said.
According to the Alberta Energy Regulator, there are nearly 200,000 inactive or abandoned wells in the province.
Binnu Jeyakumar, director of electricity at the Pembina Institute, said inactive oil wells and renewable sites aren’t the same.
“We get orphan wells because we run out of viable gas production in these locations,” she said. “You don’t run out of wind or solar in a location.”
When equipment breaks down, it may be viable for an owner to install new turbines or panels, she said.
Jeyakumar also challenged the premier’s assertion that solar and wind are unreliable sources of electricity. She said hours of sunlight and weather are predictable: an electrical system operator can plan for those fluctuations by using diverse sources of energy, and by building more storage, transmission and distribution systems.
Most solar panel systems are built so snow and ice slide off or melt, she said.
She said building a new gas plant is a risky commitment in a world where energy prices fluctuate wildly and the power plant is likely to be around for another 30-to-40 years. She said there are sound reasons why investors are turning to renewables.
“I’m not saying we should only build solar,” she said. “But we should be basing our grid on solar and wind, because they are the cheapest options.”
‘We are a natural gas province’: Smith says Alberta needs power plants, not wind and solar
Alberta’s premier assured a ballroom of rural leaders Wednesday that she does not want to see the province move away from electricity generated from fossil fuels, while complaining about solar panels covering farm land.
“This is a natural gas basin. We are a natural gas province and we will continue to build natural gas power plants because that is what makes sense in Alberta,” Danielle Smith said.
“Yes, hydro makes perfect sense in Quebec and B.C. and Manitoba. And Ontario has nuclear and hydro as well. But we have to keep fueling our economy with natural gas power plants.”
Smith made the comments at the spring convention of the Rural Municipalities of Alberta (RMA) that was held in downtown Edmonton. The RMA is made up of 69 counties and municipal districts.
She added that carbon capture and usage will help Alberta meet emissions goals, but didn’t mention climate change.
The premier’s comments on power came after she was asked about a lack of municipal control in project approval and solar panels covering “prime land” without cleanup bonds in place to make sure companies pay for reclamation.
“I’m supportive of solar and wind projects where they make sense. But I can tell you from conversations with people in my own community that putting solar panels on prime agricultural land does not make sense,” Smith responded.
“Especially like the one I drive past in Brooks every day I go down there. It’s covered in ice and snow and not generating any power at all.”
Jim Wood, mayor of Red Deer County, also asked Smith what Alberta is doing to make sure renewable energy companies clean up projects that one day become defunct.
“The concern is this: Some of these solar may be only viable due to carbon-credit grants and so forth that may not be here forever. The companies may not have enough finances to in fact do the cleanup,” Wood said.
“And if they’re not viable enough to put a bond up to cover their cleanup, then they’re not viable. And I think it needs to be addressed at the start or we’re going to have the same problem as the orphan wells. And why would we want to bring that to the province of Alberta?”
Smith said legislation requiring cleanup bonds is an “open question” for her government and one she plans to consult rural leaders on in the future.
The premier has faced widespread criticism lately over a plan to give royalty breaks to oil companies for cleaning up inactive wells, which they’re already legally required to.
The province’s energy minister last week called the Opposition “anti-oil and gas activists” after an NDP MLA demanded companies pay for the cleanup themselves.
The NDP claims the government’s proposed $100 million Liability Management Incentive Program is only the start of a $20 billion giveaway to oil and gas companies.
MLA Marlin Schmidt called the initiative “a scam” in the legislature, drawing a warning from Speaker Nathan Cooper for use of the word.
On Wednesday, Smith acknowledged Alberta first needs to figure out how to get orphan wells reclaimed before requiring renewables companies to do the same, but like wells, believes it will become an issue in the future.
“In the case of wind-turbine farms, as I understand it, when installing them typically is 1,500 truckloads to install them, that means someone has to pay 1,500 truckloads to take them away,” she said.
NDP Leader Rachel Notley agreed that there needs to be plans in place to clean up all energy projects, but said the government is going about it in the wrong way.
“Danielle Smith is campaigning on giving billions of taxpayers’ dollars to financially solvent companies that are choosing not to clean up after themselves. She can’t be trusted on this issue,” she said in a statement to CTV News Edmonton.
Political scientist Duane Bratt said he wasn’t surprised by Smith’s comments because being loud cheerleaders of the oil and gas industry is a clear strategy of the UCP government.
“When they talk about renewables, they talk about it not working when the wind isn’t blowing and the sun isn’t shining and so pivoting to waste issues on renewables, that’s totally on brand,” he said.
Last year, Alberta had an installed capacity, the maximum electrical output under specific conditions, of 67 per cent from natural gas and coal and 31 per cent from solar, wind and hydro, according to Alberta Electric System Operator (AESO).
In 2019, about 89 per cent of Alberta’s electricity came from fossil fuels and 10 per cent from renewables, according to the Canada Energy Regulator.
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